SB 356-FN – AS INTRODUCED

AN ACT relative to undue hardship knowingly caused by persons aiding in the transfer of assets.

SPONSORS: Sen. Clegg, Dist 14; Sen. Morse, Dist 22; Sen. Gallus, Dist 1; Sen. D’Allesandro, Dist 20; Rep. Kurk, Hills 7; Rep. Newton, Straf 1; Rep. Major, Rock 8; Rep. D. Eaton, Ches 2

AN ACT relative to undue hardship knowingly caused by persons aiding in the transfer of assets.

AN ACT relative to undue hardship knowingly caused by persons aiding in the transfer of assets.

The Judicial Council, Judicial Branch and New Hampshire Association of Counties state this bill will increase state and county expenditures by an indeterminable amount in FY 2007 and each year thereafter. The Department of Health and Human Services states this bill will have an indeterminable fiscal impact on state expenditures and state and county revenue in FY 2007 and each year thereafter. The New Hampshire Municipal Association states this bill may reduce local expenditures and increase local revenue by indeterminable amounts in FY 2007 and each year thereafter.

The Judicial Council indicated only transfers made by an individual would have a fiscal impact on state funds since the right to counsel does not apply to business entities. The Council assumes that any cases arising from the enactment of this bill for which the Indigent Defense Fund may be liable, will in the first instance, be handled by the public defender or contract attorney who accepts these cases on a fixed fee basis of $275 per misdemeanor charged. If an assigned counsel attorney must be used, the hourly rate of $60 with a fee cap of $1,000 will apply. If a motion to exceed the fee cap is approved and/or “services other than counsel” are approved, these will also be chargeable to the Indigent Defense Fund. Any charge within the criminal justice system, committed by a juvenile, will be compensated within the flat fee contract system of $275 per case through disposition, plus $206.25 for each and every review hearing following disposition. Assigned counsel will be at the $60 per hour rate with a fee cap of $1,200. The fee cap may be waived upon motion filed with the court and approved in advance. Any case where a defendant has been found guilty may also result in appeals to either the Superior Court or the Supreme Court which would have a cost implication for indigent defense expenditures made by the State. The Council is unable to predict the number of cases which may result from the passage of this bill, and are unable to determine the exact fiscal impact at this time.

The Judicial Branch indicated there have been about sixty welfare fraud cases annually in the superior and district courts over the past several years. The Branch determined the average cost to process a misdemeanor case in the district court is $36.71 for a class B misdemeanor and $50.29 for a class A misdemeanor. The Branch assumes this new unspecified misdemeanor offense would add a few more cases, but does not expect the resulting fiscal impact to exceed $10,000.

The New Hampshire Association of Counties states this bill may increase county expenditures for pre-trial detainment and incarceration for sentenced inmates. The counties are not able to estimate the number of individuals that will be convicted and sentenced by stated the counties average annual cost of incarceration is $21,633.

The Department of Health and Human Services assumed the following:

• The provisions of this bill are intended to target applicants for Medicaid long-term care services.

• The requested Medicaid Section 1115 waiver on asset transfers is not yet in effect.

• Sections III-a (a) 1 & 2, currently in administrative rules He-W620, will have no fiscal impact but are being included in statute by the bill.

• Approximately 5-10 waivers are requested and granted each year.

• Based on information from a 12-month period in 2003, the average duration of a penalty for individuals whose penalty had not expired at the time of application was approximately 2 months. It is assumed individuals granted a hardship waiver following a penalized transfer will become eligible for medical assistance 2 months sooner than they would have without the hardship waiver. Four percent of 3,000 Medicaid nursing home applicants had transferred assets within the look back period and 26% of those individuals were still in penalty as of the date of application.

• The statewide average expenditure for a nursing home resident on Medicaid is $3,000 per month, divided among the federal government (50%), the state general fund (25%) and counties (25%).

• Section III-a(b) will increase the number of hardship waivers granted by a unknown number.

• Section III-b will increase assets available subject to Medicaid recovery. Any lien arising from this section would be attached to real property although other methods of garnishment or claim perfection may be possible. The Department is not able to predict the number of transfers of real property or the values of such transfers that will occur after passage of this bill. The Department is not able to determine how or when the state would be able to collect on the liens or how much revenue would result.

• Proceeds from recoveries are divided among the federal government (50%), the state general fund (25%) and counties (25%), which are the same percentages as long-term care expenditures.

• Additional cases would increase the work and associated costs within the estate recovery unit. The increase in cases cannot be projected.

The New Hampshire Municipal Association assumed this bill may indirectly limit municipal expenditures on local welfare programs by discouraging the certain asset transfers and providing a mechanism for the recovery of assistance should an illegal transfer take place. The Association is not able to predict the potential savings or recovery of assistance that may result from this bill.

The Department of Justice indicated this bill will have no fiscal impact on its operations. The Department stated the Medicaid Fraud Unit is notified when a Medicaid applicant’s agent or guardian has transferred assets within the look back period in a manner that may result in the imposition of a penalty regardless of whether or not the penalty is waived because of undue hardship. Since the Medicaid Fraud Unit already investigates the circumstances surrounding asset transfers and seeks civil recoveries where appropriate, the Department assumes this bill provides an alternate legal remedy, but should have no effect on the number of cases handled by the Medicaid Fraud Unit.